DIRECTORS' REPORT To The Members Your Directors have pleasure in presenting the 65th Annual Report of the Company together with Audited Accounts thereon for the year ended 31st March 2015. PERFORMANCE The Company has achieved Sales and Production of Rs. 619.81Crore and Rs. 617.81 Crore respectively during the year 2014-15 against Rs.769.90 Crore and 767.91 Crore respectively during the previous year 2013-14. The Company could achieve this turnover in spite of the fact that our major customers BSNL and MTNL have not placed any major orders like earlier years. The net loss of the Company for the year 2014-15 is Rs. 297.12 Crore against the figure of Rs.344.26 Crore for the year 2013-14. The net loss for the year 2014-15 is the lowest ever loss in the last 13 financial years (if the financial assistance by way of grant from the Government is not taken into account). The contribution (net of material cost) for the year is Rs 172.25 crore, which is comparable for that of previous year at Rs. 184.99 crore. IMPLEMENTATION OF REVIVAL PACKAGE The CCEA approval with a financial package of Rs. 4156.79 Crores for the revival of ITI was accorded on 12th February 2014. This consists of Rs. 2264 Crores towards capex for implementation of various projects in 18 technology domains in all the plants of ITI and Rs. 1892.79 Crores as grant-in-aid to meet part of ITI's liabilities. Against the capex grant of Rs. 2264 Crores, Government has released Rs. 192 Crores to ITI in February 2015. Sixteen projects have been identified for the investment of this amount. Advance action for implementation of these projects has been initiated in the plants as early as mid 2014, after the approval of the projects by ITI Board followed by DoT and the Apex Committee. Immediately on transfer of capex by the Government in February 2015, ITI plants have taken action to place purchase orders for the equipments required as part of infrastructure up-gradation for the implementation of the projects. Multi-pronged approach has been adopted, involving Corporate Management, Unit Management, Trade Unions etc., for successful implementation of the projects. Projects teams have been formed in all the units for project management and also monitoring of implementation of the projects. Regular monitoring of the implementation is also done at ITI Corporate. Periodic review meetings have been held by DoT at the level of Member (Services) and further review meetings by the Apex Committee. The Government of India Budget BE 2015-16 includes an additional allocation of Rs. 50 Crores for ITI under plan head. Projects for utilization of this amount have been already identified. This money would be required during the third or fourth quarter of 2015-16. Against the CCEA approval of Rs. 1892.79 Crores to ITI as grant-in-aid under the revival plan, Rs. 165 Crores was released in November 2014 towards payment of 1997 wage arrears. The 39 month wage arrears corresponding to the period from January 1997 to March 2000 have been paid to almost all the employees including retirees and only a few cases having some dispute or unclaimed cases are pending. HIGHLIGHTS The turnover for the year 2014-15 is mainly constituted from National Population Register (NPR), NGN, AMC for GSM-SZ, GSM-WZ, OCB, MLLN & ASCON, Defence and IT Solutions. The company is executing turnkey project of Registrar General of India (RGI) for creation of Multi Purpose National Identification card under National Population Register Project for the country. The Company has received the Purchase Order for NFS Project from BSNL for Rs.2984 Crore which involves procurement, Supply trenching, laying, Installation, testing and maintenance of Optical Fiber Cable, PLB Duct and accessories for construction of exclusive Optical NLD backbone and Optical access routes on turnkey basis in the Eastern and Northeastern region of the country. • Next Generation Network (NGN) ITI Bangalore plant successfully executed the purchase order worth Rs.47.20 Cr. for NGN products received from BSNL. Further, Advance Purchase Order (APO) from BSNL to the tune of Rs 120 Cr is available for execution of this project during 2015-16. • National Population Registration (NPR) and Socio Economic & Caste Census (SECC) projects ITI is one among the consortium of three PSUs (other two PSUs being M/s BEL & M/s ECIL) for the execution of prestigious National Population Register (NPR) Project under Ministry of Home Affairs (MHA). The job involves collection of citizen data including biometrics which is under execution. The above consortium is also executing SECC project for the Ministry of Rural Development (MoRD). • GSM ITI has implemented GSM Projects in BSNL West Zone and MTNL-Mumbai in technology alliance with M/s Alcatel-Lucent & in South Zone in technology alliance with M/s Huawei. The Annual Maintenance Contract related works have been carried out in these zones. • Defence projects ITI is the leader in supplying encryption equipments for the secured communication in the Defence networks. In the year 2014-15, ITI had executed orders from Defence sector for IP encryptors, NGN (BU), 5C telephone instruments etc. • Fiber Cable Laying for Network for Spectrum (NFS) In the tender floated by BSNL for laying optical fiber cables under NFS project, ITI was L1 for 2 zones (out of seven) and has received Purchase Orders from BSNL worth Rs 2111 Crore (excluding AMC) for laying of optical fiber cable in the east and north eastern part of the country. The project is currently under execution with support from technology partners. • Switch Mode Power Supply (SMPS) ITI Raebareli plant is manufacturing SMPS systems and executing the orders from BSNL / MTNL. • Data center & IT Projects ITI has already established Tier 3+ state-of-art Data center at Bangalore on PPP model. Presently this Data Center is fully booked for co-location services. ITI is also playing a major role in implementing IT projects. The Government is pursuing E-Governance projects for taking the benefit of IT to the Village Panchayats and a substantial budget provision has been made by the Government for the same. ITI is aggressively pursuing this market segment. ITI has executed SWAN (State Wide Area Network) projects of Maharashtra, Odisha and Mizoram. ITI is also executing Accelerated Power Development and Reform Programme (APDRP) of Tamil Nadu state. • Maintenance Contracts ITI had earlier established the ASCON network for Indian Army. ITI was also the major supplier of fixed line switches to BSNL and MTNL. Currently ITI has been extending maintenance assistance to Indian Army for ASCON and to BSNL and MTNL for OCB exchanges, MLLN and STP Networks under Annual Maintenance Contracts. SHARE CAPITAL The shareholders at the Extra Ordinary General Meeting held on 9th January 2015 has approved the increase in authorized share capital from Rs. 700 crores to Rs. 1200 crores in total. Accordingly, the Equity share capital has been increased from Rs. 300,00,00,000 (Rupees Three Hundred crores) divided into 30,00,00,000 (Thirty Crores) equity shares of Rs. 10 each to Rs.800,00,00,000 (Rupees Eight Hundred crores) divided into 80,00,00,000 (Eighty Crores) equity shares of Rs.10 each. The existing Preference Share Capital of 4,00,00,000 Redeemable Cumulative preference shares of Rs.100/- each remains the same. The paid up Equity Share Capital as on 31st March 2015 was Rs.288,00,00,000. During the year under review, the Company has received Rs.192 crores from Ministry of Communications and IT for meeting the expenditure towards CAPEX implementation of various projects in its various plants, during February 2015. The Process of allotment of shares to Government of India and ensuring minimum public shareholding, is being done as per directions of Ministry of Communications and IT. During the year under review, the Company has not issued shares or granted stock options or sweat equity. As on 31st March 2015, none of the Directors of the Company hold any shares of the Company. DIVIDEND As your Company has incurred a loss, the Directors are not in a position to recommend any dividend for the year 2014-2015. HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS • BANGALORE PLANT Bangalore plant achieved a turnover of Rs. 157.04 Crores (with ED) & the Net turnover of Rs. 145.02 Crores. The Supply consisted of Defence equipment worth Rs. 19.32 Crores, Telesets, Magneto & Naval telephone equipment worth of Rs. 1.64 Crores, Primary Mux, Data cards worth Rs. 3.13 Crores, Service & Def. AMC worth Rs. 10.52 Crores, Contract manufacturing worth Rs. 1.04 Crores and Data Centre turnover worth of Rs.13.9 Crores. NGN supplies worth Rs. 47.66 Crores, GSM AMC (South Zone) worth Rs. 42.71 Crores, CDMA WLL AMC worth Rs. 7.2 Crores, IFWT equipments worth Rs. 1.63 Crores, GSM South Zone Projects worth Rs. 5.66 Crores, Tablet PC supplies worth of Rs. 1.06 Crores and ISAT Phone (CRPF) usage charges of Rs. 1.57 Crores. During the year, the plants also addressed tenders for MIL PCM 1000 nos. AWAN II project E3CR, 5C telephones and other Secrecy equipments like STM1 and 2Mb/s. The total value of the tenders is approximately Rs.350 Crores. During the year, the plant signed a MoU with M/s HAL "to work together for manufacturing of contract products and services". Reliability Labs have been opened up for external agencies to utilize the facilities, thus making it an independent revenue generating centre. Energy Consumption for the year is 21,92,638 Units compared to 25,12,700 Units during the same period last year, a saving of 12.74%. The turnover of the plant is 3 times more that of last year and the Operating Profit is Rs.3 Crores. • MANKAPURPLANT Prestigious NFS project for package F in six states for construction of exclusive optical NLD backbone and optical access route on turnkey basis for Defense network has been allocated to ITI Mankapur. It is worth approx. Rs. 1150 Crs. including AMC. The project is currently under execution Mankapur Plant achieved a turnover of Rs. 1.84 Crs. (including ED) during 2014-15. Under NPR-40 project in Bihar and Chhattisgarh, Biometric Enrolment worth Rs. 0.046 Cr. has been done. The plant supplied C-DOT equipments worth Rs. 0.40 Cr., Bank Mechanization products of approx. Rs. 1.17 Cr, LED based products worth Rs. 0.029 Cr. and BTS worth Rs. 0.19 Cr. ITI Mankapur undertakes repair of the cards for ongoing AMC work through NSU and GSM project groups. During the year ITI Mankapur generated SSU revenue worth Rs. 6.11 Crs, out of which Rs 2.95 Crs. is from SSU cards repair and Rs. 3.03 Crs. is from BTS card repair. ITI Mankapur has established "Finishing Schools" for the engineering under graduates pursuing higher studies or skill development. Under Finishing School project towards the knowledge based activities, ITI Mankapur earned revenue of approx. Rs 0.16 Cr. while imparting training on technical innovation and skill up gradation to the engineering students from various reputed Engineering. Colleges of the country, which helps them in getting better career opportunities. During the Financial year 2014-15, the plant has bagged 2 National Safety Awards for Performance Year 2012 - WINNER for Lowest Average Accident Frequency rate and WINNER for Accident Free year accumulating to 26 such awards in past 14 years. Austerity measures undertaken at ITI Mankapur have resulted in reduction of expenses on different accounts especially in the area of energy conservation. The major steps undertaken for energy conservation during the year 2014-15 are optimization in usage & running of central air conditioning plant, power factor management to get electricity billing benefits etc. As a result, the physical units consumed in the year 2014-15 in the factory has reduced by about 10 lakh units i.e. more than 25% saving as compared to year 2013-14. • RAE BARELI PLANT NFS cable laying project Rae Bereli plant is Executing purchase order for laying of optical fiber for the G package for the prestigious NFS project. This order is Valued at approximately Rs.1800 Crores (including AMC). Solar Charge Controller Unit (CCU) CDAC(T), and ITI Ltd submitted a joint proposal for the "Development of Solar Charge Controller Unit for Telecom Application" as a technology development project under NaMPETPh-II. The National Steering Committee of NaMPETPh-II has approved this proposal for funding, by DeitY. The major objectives of the proposal involve the "design, development, testing, and fabrication of prototypes and for this purpose. Memorandum of Agreement is entered into with Centre for Development of Advanced Computing, Vellayambalam, Thiruvananthapuram (CDAC-T). These equipments are required for supplying power to BTS of cellular network. A huge market is expected from BSNL/MTNL and other cellular operators. SMPS Project With a CAPEX of Rs 3.4 Crores SMPS Power Plant business has been expanded with high capacity power plant which includes all ranges of power plants required by BSNL/MTNL as given below: • 25A , Ultimate Capacity 200A Indoor • 25A , Ultimate Capacity 200A Outdoor • 50A , Ultimate Capacity 450A Indoor • 50A , Ultimate Capacity 450A Outdoor • 100A , Ultimate Capacity 3000A Indoor Contract Manufacturing With a CAPEX of Rs. 1.54 Crores following contract manufacturing business has been taken up • Signed rate contract with BHEL Jagdishpur for repair of tools/ contract manufacturing of items. Already executed small value of order. • Registered with Rail Coach Factory as approved vendor and tenders are being addressed. • Discussion with CDAC Noida is in process for Rate contract of PCB assembly. • Manufactured 500 nos. of VTS card of M/s Sway using SMT line as a job work and based on the performance report rate contract to be signed for future orders. PLB HDPE PIPE With a CAPEX of Rs. 3.0 Crores a production line of PLB HDPE (Permanently lubricated High Density Poly Ethylene) Pipe, used for laying of optical fiber cable (OFC) is being set up. Orders for all the machinery have been placed. Installation & commissioning of 350 kg/hr capacity HDPE production line has been completed. The probable customers are BSNL/ MTNL/Defence and other Telecom Service Providers. 3D Printer RB unit is entering into a new era of manufacturing with 3D Printing Technology. 3D printing is evolving rapidly, for fast prototype development requirements in numerous industries including defense, aerospace, automotive and healthcare. 3D printing products are far superior (lighter, stronger, customized, already assembled) and cheaper than those designed with traditional manufacturing processes. That is because 3D printing can control exactly how material is deposited (built up), making it possible to create structures that cannot be produced using conventional means. The planned CAPEX for this project is Rs. 4.40 Crores. VTS Project ITI-RB has signed MoU with M/s Sway Techno Solutions Pvt Ltd, Noida, for Vehicle Tracking System(VTS), Personnel Tracking and Object/ Asset Tracking. ITI RB unit will be manufacturing the hardware and Application software portion will be taken care by MoU partner. The plant has already addressed a few tenders for these products and following potential customers are being identified. • Defence & Para-military forces ITBP Delhi • Coal mines/Oil Marketing Companies • Banks Proof of Concept (POC) for the safety of ATM of State Bank of Patiala at Jalandhar and other five locations have been successfully completed. Estimated CAPEX for this project is Rs. 3.0 Crores. Skill Development The plant has initiated many programmes for skill development in partnership with Telecom Sector Skill Council (TSSC). • ITI RB is the first unit in ITI to conduct Training for trainers programme for BSS support course. • About 50 Engineering students of 3rd year, E&C branch are expected to register for training on BSS support QP. • Training is planned during the month of March & May, 2015. • Such training programme will generate good revenue for ITI. • NAINI PLANT ITI Naini is gearing up for addressing Solar Projects-particularly production of SPV modules of both low and high capacity/wattage. For supply of Solar panels, IEC certification is mandatory in most of the cases. In this direction, ITI Naini has already got IEC certification for low wattage (up to 50W) modules. Highlights for the year 2014-15 Reduction of sundry debtors from Rs. 15.18 Crores to Rs. 8.88 Crores by focusing on realization against opening balance (net of provisio) as on 01.04.14. 1. High Wattage production line with manual Tabbing and Stringing has been stabilized. 2. The plant is ready for bulk production of SPV up to modules 300W. 3. The card repair and other service activity performed to the tune of approx. Rs. 14.75 Lakhs. 4. Skill development training program on"Solar module Technician" conducted for ITI students = 02 Programs (for 62 students). 5. In-house fifteen (15 no.) training programs conducted for ITI employees. 6. Survelliance audit of ISO 9001 and ISO 1401 are conducted. • PALAKKAD PLANT The Unit has achieved a turnover of Rs. 146 Crs. for the year 2014-15 registering profit. The work of SECC and NPR Project in the allotted States has been completed and additional orders for Data Digitization, Data Merging and Permanent Data Centers worth Rs. 55 Crs under these Projects would be executed by the plant. As a part of diversification of products, plant has made inroads in the Defense Manufacturing area and Space Electronics by supplying Cables, Bare PCBs and Assembled PCBs to NPOL, HVF Avadi, VSSC etc. Separate manufacturing area for Space Electronics fabrication has been set up to meet the requirements of stringent quality norms of Space Related products. AMC contract worth Rs 93 Crs has been renewed with BSNL and MTNL for MLLN and SSTP Equipments for further 5 years and 3 years respectively. Orders worth Rs 11.83 Crs for MLLN RNP Cards and Modems, Data Base License for SSTP, NMS Sever up gradation orders from BSNL / MTNL have been received during 2014-15. Palakkad plant has successfully completed re-certification audit for Quality Management System and surveillance audit for Environment Management System. In the Industrial Safety front, Palakkad has been the winner for the Outstanding Safety performance in the large size Engineering Industries Group from National Safety Council Kerala Chapter. • SRINAGAR PLANT The sales performance of Srinagar Unit for FY 201415 is Rs.0.01 Crore against Services. ITI Srinagar Plant has been facing various difficulties for retaining or posting talented manpower in Srinagar. With a view to motivate and develop the skills of the employees posted at Srinagar area, the company has envisaged training plans during November 2014. Priority will be given for training of employees working in J&K region, so that they can be employed on jobs requiring various skill sets by deputing them to other units, wherein training will be imparted in the specific skill set/ project etc. In accordance with the training plan, ten employees of Srinagar Plant initially have been trained in two batches on "Assembly and Testing of SPV Modules" at ITI Naini Plant, UP State. Srinagar Plant is also exploring the possibilities of initiating skill development training programmes of telecom sector skills for the students of Srinagar State. To begin with the Skill Development training in Base Station Support Engineer (BSS) of TSSC Qualification Pack is contemplated. • NETWORK SYSTEMS UNIT Network Systems Unit achieved a performance of Rs 93.58 Crores. The performance mainly comprises of annual maintenance contract for fixed line OCB exchanges worth Rs 36.50Crs. for BSNL& MTNL and AMC for ASCON upto November 14 worth Rs 56.93 Crs. From Dec-14, the renewal of AMC for ASCON for another five years with average annual value of around Rs. 88 Cr has been finalised with MoD. Also another AMC proposal for 12+1 up gradation project for Indian Army with average annual value of around Rs. 11 Cr/annum has also been finalized. HIGHLIGHTS OF REGIONAL OFFICES Performance: • Performance of ROs for the FY 2014-15 is Rs. 155.67 Crs. • Sundry Debtor realization during 2014-15 is Rs. 99.18 Crs. • Order bagged in 2014-15 is Rs. 77.97 Crs. • Rs. 179.88 Crs orders on hand as on 01.04.2015. • RO Kolkata completed first phase of NPR in West Bengal, enabling Palakkad Unit to bill Rs. 17 Crs. New Projects taken up in 2014-15 • E-Tendering services for DDA, Delhi. Estimated business Rs. 100 Crs. in 5 years - RO Delhi • Supply, I&C of EPABX Systems of value Rs. 6.18 Crs. for Cabinet Secretariat- RO Lucknow • Establishment of LAN / WAN for East Delhi Municipal Corp. of value Rs. 3.1 Crs. - RO Delhi • Implementation of Online Admission & Exam for University, value Rs. 1.8 Crs. - RO Lucknow Major orders successfully completed in 2014-15 • E-Tendering business of value Rs. 38.24 Crs. -RO Delhi, Bangalore, Kolkata & Lucknow • Establishment of Police Control Room of value Rs. 6.82 Crs. for UP Police - RO Lucknow • Supply, I&C of EPABX Systems of value Rs. 6.18 Crs. for Cabinet Secretariat- RO Lucknow GSM Projects: The Company carried out AMC services for GSM Network worth Rs.83.43 Crore against BSNL orders in West Zone. RATING IN MEMORANDUM OF UNDERSTANDING The company's rating for the year 2013-14 is "GOOD" with a composite score of 2.86. This composite score is BEST during twelve years, i.e. 2002-03 to 2013-14. The company has signed Memorandum of Understanding with the Administrative Ministry for a Sales Turnover of Rs.1800 Crores for the year 2014-15. FUTURE OUTLOOK In the Union budget 2014-15, Government had approved Rs 192 Crore as first phase disbursement to the Company towards capital expenditure under revival plan. This amount has already been received by ITI and several projects under Defence business, SCADA, MLLN, Smart cards, HDPE Pipe manufacturing, SMPS, Component screening, Vehicle Tracking System (VTS), 3D printing, Contract manufacturing, Business with PSUs etc., have been identified. The infrastructure up gradation for implementation of these projects is in progress in Bangalore, Rae bareli and Palakkad plants. The Company is looking at the following business opportunities in the future. • Defence projects Being one of the leading suppliers of encryption equipments for the secured communication in the Defence networks, ITI is looking at Defence market as a great opportunity for its business. With greater thrust towards domestic manufacturing of Defence equipments, ITI proposes taking up manufacturing of new products for Defence like, Software Defined Radio (SDR), High Frequency Radio Handsets, TR modules for RADAR, equipments for Army Wide Area Network (AWAN Phase II) etc. The Ministry of Defence had approved in principle for the establishment of Strategic Business Units (SBUs) at ITI at Bangalore and Raebareli plants to take up manufacture of DRDO designed products at ITI. The formation of SBUs is aimed at establishing facilities at ITI for the production of strategically important network and communication components, modules, systems designed and developed by DRDO. Necessary action is under progress to achieve the above objective. Another major project which has been launched by Indian Army is ASCON Phase IV. Earlier three phases of ASCON project have been executed by ITI successfully. ITI is hopeful of winning the order for ASCON phase IV for which a tender has been released by Indian Army. • Solar Project: There has been special emphasis by the Government of India to implement the renewable energy sources including solar to overcome the environmental hazards and meeting the growing energy needs. ITI, having requisite expertise and experience for implementing Solar solutions, is planning to augment the solar panel manufacturing infrastructure in its Naini plant and is also planning to install one more manufacturing facility at its Srinagar plant. Naini plant has earlier executed Solar project for U.P Police and BSNL. More orders are expected in this market. • Core Telecom Products: ITI is pursuing on addressing the core telecom market like GSM, Next Generation Networks (NGN), Long Term Evolution (LTE), Managed Leased Line Network (MLLN), SSTP etc. • LED Lighting: LED lighting is an environmental friendly option due to non-use of mercury. Market potential for this product is very good. ITI is planning to address this market. Potential areas of business opportunities are from National Highway Authority, State Governments and Municipal Corporations, CPWDs/ PWDs, Railways, Hotels and Hospital Industry etc. • Wi-Fi for NOFN network: Huge orders are anticipated for Wi-Fi equipments for deployment in NOFN (National Optic Fibre cable Network) project of Government of India. ITI is in the process of empanelling the back end partners for the execution of anticipated orders. • Manufacture of Citizen ID Cards: As an extension of NPR project which is under execution by ITI as a consortium partner with BEL and ECIL, ITI is also looking at the huge opportunity of manufacturing SMART card based citizen identity cards for all the citizens in the Country. ITI is already having SMART card manufacturing facility at its Palakkad plant. This will be further augmented to take manufacture of citizen ID cards. • Manufacturing of Li-Ion Batteries: High density back up power solutions using Li-Ion technology have been proved in all fields of consumer electronics like PCs, Mobile phones, Tablet PCs etc,. They are also making inroads into other applications like powering GSM towers. ITI is planning to take up manufacturing of Li-Ion batteries in one of its plants. CONTRIBUTION TO EXCHEQUER During the year, your company has contributed Rs. 97.37 Crore to the exchequer towards duties and taxes. PUBLIC DEPOSITS Value of deposits held by the company was NIL. Deposits aggregating to Rs. 0.24 Crore had matured for payment, but were not claimed on due dates. REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTS DEPARTMENT The comments on the accounts for the year 201415 by the Comptroller and Auditor General of India is appended. JOINT VENTURES INDIA SATCOM LIMITED India Satcom Ltd., (ISL) is a Public Limited Company incorporated in the year 1987 by ITI, Unit Trust of India (UTI) and Equatorial Pacific International Company (EPIC). Both UTI and EPIC sold their respective stakes in ISL to M/s Chris Tech Systems Pvt Ltd (CTSPL) during 2006. ITI also took steps to sell its entire 49% stake but the Government of India, Ministry of Communications & IT did not approve the proposed sale of ITI shares in ISL. Presently the shareholders in the Joint Venture are ITI (49%) and CTSPL (51%). ISL planned to revive the operations of the company through a JV proposal of National Building Construction Corporation Ltd, a Govt. of India Enterprises (NBCC), on a land purchased by ISL from Karnataka Industrial Area Development Board (KIADB). ISL will take steps to obtain the required approvals for ISL-NBCC JV proposal as directed by ITI and BIFR, once the Forest case on this ISL land purchased from KIADB is resolved in the Hon'ble High Court of Karnataka. QUALITY Quality policy of ITI is to "deliver high quality, secure and reliable products, services and solutions" by empowering every employee. Quality Assurance wings have been established in all the manufacturing units of ITI Ltd. The QA wings are responsible for Quality of products and services. The Units have been well equipped with necessary test facilities and test systems for carrying out elaborate tests, conducting reliability evaluations on all the products to ensure quality. This is achieved by sound and effective Quality Management System. The five manufacturing plants at Bangalore, Palakkad, Mankapur, Rae Bareli and Naini have been accredited with ISO 9001:2008.NSU Bangalore is also accredited with ISO 9001-2008. The periodical Surveillance Audit & Recertification Audits have been conducted successfully. Keeping in tune with the Global concern for Environmental Management, all the plants have gone in for ISO 14001:2004 EMS certifications. The guidance and support to all the units for training, implementation surveillance audits & recertification audits of ISO 9001-2008 and EMS 14001: 2014 are provided by Corporate Quality Assurance. BSNL has granted AIS (Approved Inspection Scheme) status by BSNL QA for SIM Cards. Localization activities continued during the year to procure items such as cables, connectors and PCBs for GSM-BTS Project with Alcatel approval and after approval from VDA, VRC, Standards Components Testing and Reliability Labs provide Qualification Approval Standardizations of electronic components Vendor Development and Vendor Rating after stringent evaluation in Testing in Reliability and Environment al laboratory. DIRECTORS AND KEY MANAGERIAL PERSONNEL The President of India is empowered to appoint the Directors of the Company from time to time and also to determine the terms of office of such Directors in terms of the Articles of Association of the Company. Accordingly, the following changes on the Board of your Company were effected during the year as per the directives of the President of India. ? Shri P K Gupta appointed as Director Marketing w.e.f 27.03.2014 ? Shri S Gopu was appointed as Director-HR w.e.f 16.04.2014 ? Shri R K Mishra was appointed as Government Director in the place of Shri N K Joshi, w.e.f 25.07.2014 ? Dr Janaki Ananthakrishnan, has been appointed as Government Director in the place of Shri R K Mishra, w.e.f 13.05.2015. Subsequently, Government of India has appointed her as Director Finance w.e.f 10th June 2015. ? Shri K K Gupta, Director Production was granted extension of tenure w.e.f 01.06.2015. Shri K K Gupta, Director Production was also entrusted with additional charge as Chairman and Managing Director in the place of Shri K L Dhingra, who was holding post as Chairman and Managing Director from 07.04.2010 Shri K L Dhingra was relieved from services w.e.f 03.06.2015 ? Shri Srikanta Panda, has been appointed as Government Director in the place of Dr Janaki Ananthakrishnan, w.e.f 29.07.2015, since she has been appointed as Director Finance. The Board placed on record its deep appreciation of the valuable services rendered by the Directors whose term of office ended during the year. In accordance with the provisions of the Companies Act, 2013, Shri P K Gupta and Shri S Gopu retire by rotation and are eligible for re-appointment. Independent Directors shall not be liable to retire by rotation. The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013 The policy on Director's appointment and remuneration and also remuneration for Key Managerial Personnel forms part of Corporate Governance Report of this Annual Report. NUMBER OF MEETINGS OF BOARD During the year, 6 meetings of the Board were held on 07.04.2014, 30.05.2014, 13.08.2014, 13.11.2014, 09.01.2015 and 13.02.2015. PARTICULARS OF EMPLOYEES There were no employees of the Company who received remuneration in excess of the limits prescribed under Companies Act, 2013 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. CORPORATE GOVERNANCE The new Companies Act, 2013 and amended Listing Agreement have strengthened the governance regime in the country. Accordingly, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report. A Certificate of the CEO and CFO of the Company in terms of Clause 49 of Equity Listing Agreement, inter alia, confirming the correctness of the financial statements and cash flow statements and adequacy of the internal control measures, is also annexed. During the year, Secretarial Audit was carried out by Shri D Venkateswarlu, Company Secretary in practice, and the Secretarial Auditor of the Company for the financial year 2014-15. There were observations given by Secretarial Auditor of the Company. The detailed report on Secretarial Audit and reply of the Board of Directors to the observation made in the said report are appended as an Annexure to this Report The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure to this Report. Related Party Transactions In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.itiltd-india.com . The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable. AUDITORS > STATUTORY AUDITORS M/s. Sundar Srini & Sridhar, Chartered Accountants, Bangalore, were appointed by Comptroller & Auditor General of India as Statutory Auditors for the year 2014-15. > BRANCH AUDITORS The following firms of chartered Accountants were appointed as Branch Auditors for different plants of the Company for the year 2014-15 COST AUDITORS Your Company has appointed M/s GNV Associates, Cost Accountants, Bangalore, as Cost Auditors for the year 2014-15 for the cost audit of south-based units located at Bangalore, Palakkad and also consolidation for the Company and M/s. Aman Malviya & Associates, Lucknow as Branch auditors for the Cost Audit of North based units located at Naini, Rae Bareli, Mankapur and Srinagar with the approval of the Board and Ministry of Corporate affairs > SECRETARIAL AUDITORS The Company has appointed Shri D Venkateswarlu, Company Secretary in practice, to undertake the Secretarial Audit of the Company. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has set up Hospitals, Schools and Playgrounds at various Manufacturing Units for the benefit of employees and the local community. DIRECTORS' RESPONSIBILITY STATEMENT The Directors confirm that (a) In the preparation of the annual financial statements for the year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at 31st March 2015 and of the loss of the company at that date; (c) that proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) that the annual financial statements have been prepared on a going concern basis; and (e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. (f) that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made there under, your Company has constituted Internal Complaints Committees (ICC) to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15 No. of complaints received and disposed off: Nil MANPOWER Employee strength at the end of the year 31st March, 2015 was 6177 out which 542 were female employees. As on 31.03.2015, there were 992 employees belonging to Scheduled Castes and 58 belonging to Scheduled Tribes. 41 Contract Engineers / Contract Technicians and 8 Tenure Officers were recruited during the year 20142015. Employees belonging to Physically Challenged Persons numbering 88 and Ex-servicemen category numbering 30 were on the rolls of the company as at the end of the financial year. HUMAN RESOURCE DEVELOPMENT Keeping in view the Company MoU target on HRM - Training for the FY 2014-15, the HRD initiatives were more oriented towards imparting Training to Executives / Non-Executives for skill / knowledge development in Telecom and IT. Training Programmes and Workshops were organized in Broadband, OFC, Mobile, NGN, Cyber Security and Communication Technologies. Towards improving computer literacy in the company, need based Microsoft Office training programmes were imparted at Plant levels. Executives were nominated to external training programmes in advanced / specialized technologies like Encryption etc. Training programmes were also organized in-house on Soft Skills, Stress Management, Safety, besides organizing awareness programmes on Health, Environment, Energy Management; Government of India's initiative "Make in India - Zero Defect - Zero Effect" etc., were organized In a nutshell, as against the MoU target in respect of HRM performance indicators, 56 training programmes have been organized as against the target of 40 training programmes. The company trained 1117 Executives and 438 Non-Executives achieving 1195 and 608 training mandays respectively. The MoU target on HRM Training has been fully met and achieved 'Excellent' MoU Rating for the year 2014-15. INDUSTRIAL RELATIONS The Industrial Relations scenario in the Company was cordial during the year. Employees' Union and Officers' Association extended their co-operation and support in ensuring smooth work flow and helped to meet the Company's objective in revival of the company. OFFICIAL LANGUAGE All Units / Offices have established Check-points in their concerned offices to make more efforts for effective Implementation of the Official Language Policy, monitored by the Official Language Implementation Committees constituted in every Unit / Office. The Progress of Implementation of Official Language in Corporate Office as well as in all subordinate Units / Offices is also being periodically reviewed by the OLIC Committee of Corporate office. In order to enhance the working knowledge of Official Language amongst our employees, officials have been sent to Training Programme organized by the government for imparting training in Hindi, Hindi typing and Hindi Stenography as per our requirement. The Official Language Cell of the different Units / Offices have also conducted internal training programmes. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations and have been sanctioned financial incentives. Since eighty percent (80%) of the staff working in our Units / Offices like Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have acquired a working knowledge of Hindi, such Units / Offices have been notified in the Gazette of India as per OL Rules 10 (2) & (4), 1976. For Bangalore based Units/Offices, a short term workshop for Hindi Unicode training programme was organized in the HRD department of Corporate Office, with the help of Deputy Manager-OL&HR, BHEL, Bangalore. More than 30 officers/non-officers participated and they were trained how to use the Hindi Unicode Fonts in day-to-day typing work. After reviewing our quarterly report, an appreciation letter was also received from Deputy Director-OL, Official Language Department DoT, New Delhi as well as Deputy Director (Implementation), Regional Implementation Office, Bangalore. A Joint Hindi Fortnight Programme for Bangalore based PSUs / Organisations between 30.07.2014 & 27.08.2014 was organized by TOLIC (Town Official Language Implementation Committee), Bangalore and various types of competitions were arranged during this occasion. On this occasion many officers/ Non-officers of ITI Limited, Bangalore based Units / Offices participated in these competitions and more than 14 Officers / Non-Officers have got the prizes. Hindi Workshops were organised for encouraging progressive use of Hindi during 2014-15. Company's website has been made bilingual (i.e. English and Hindi). VIGILANCE During the year, Vigilance Department functioned effectively. The prime focus of the vigilance activities was on Preventive Vigilance and Reduction in pendency of complaints by expediting Investigations. Vigilance Department has suggested several System Improvement Measures to various departments to improve the transparency and efficiency of the procedures. Constant and continuous efforts have been made in this direction as a part of Preventive Vigilance. Keeping in view the emphasis laid by Company-Vigilance, Project Management Manual for Telecom Infrastructure Projects has been brought out by the Company. The Company observed Vigilance awareness week from 27th October 2014 to 1st November 2014 at Manufacturing Units, Business Establishments, as well as Corporate Office. The Vigilance department is endeavoring to lay far more emphasis on preventive vigilance, scrutinizing the APR documents and conducting periodic / surprise checks in sensitive departments. RIGHT TO INFORMATION During the year 2014-15, out of 221 RTI requests, information was provided against 175 requests, 21 requests rejected and 2 requests were transferred to another Public Authority. The RTI returns on quarterly basis is being submitted to the Ministry for forwarding the same to Central information Commission and the same is published on our Company website. ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL The expenditure on entertainment was NIL. Expenditure on official travel abroad by the officials of the Company amounted to Rs. NIL during the year. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are annexed. ITI SIGNS MOU WITH DEPARTMENT OF TELECOMMUNICATIONS ITI Limited signed the Memorandum of Understanding (MoU) for the year 2015-16 with the Department of Telecommunications, Ministry of Communications & IT, Government of India. Shri Rakesh Garg, Secretary, Department of Telecommunications and Shri K.L. Dhingra, former Chairman and Managing Director, ITI Limited signed the MoU on March 30, 2015. The MoU focuses on ITI's role in the field of Telecommunications in the current market scenario and pursue opportunities arising out of Government's "Make in India" campaign for indigenous electronic equipment manufacturing for diversified areas like Railways, Defence, etc. in addition to telecommunications also to play a vital role in Government of India funded Projects like Network for Spectrum (NFS). ACKNOWLEDGEMENT Your Directors place on record their sincere thanks for the assistance and support extended by the Ministry of Communications & IT and various other Ministries of Central and State Governments viz., Karnataka, Uttar Pradesh, Kerala and Jammu & Kashmir and look forward for their continued support and co-operation in future. Your Directors also wish to express their gratitude for the co-operation and assistance extended by BSNL and MTNL, Banks, Suppliers, Shareholders, Bondholders, Depositors, Agents, Customers and Foreign Collaborators, Committee on Public Undertakings (COPU), Standing Committee on Public Enterprises (SCOPE) and Standing Committee on Information Technology. Your Board also expresses its sincere thanks to the Comptroller and Auditor General of India, Chairman and Members of the Audit Board and Statutory and Branch Auditors. Your Directors take this opportunity to place on record their appreciation for the valuable contribution made and excellent co-operation rendered by the employees at all levels for the progress and prosperity of the Company. For and on behalf of the Board of Directors (K. K. Gupta) Director Production Addl Charge Chairman and Managing Director Place: Bangalore Date : 11th August 2015 |